Initial Public Offering and Differential Voting Rights
“Review of SEBI (DIP) Guidelines 2000- Proposals - Series I”
A. Recommendations made by the Primary Market Advisory Committee
SEBI has constituted a standing committee, chaired by Shri M S Verma, Chairman, TRAI. This committee comprises representatives from ICAI, ICSI, investor associations, merchant bankers, Industry associations, Ministry of Finance etc. The terms of reference of this committee are as follows : 1. To advise SEBI on matters relating to regulation of intermediaries for ensuring investor protection in the primary market. 2. To advise SEBI on issues related to development of primary market in ndia. 3. To advise SEBI on matters required to be taken by for changes in legal framework to introduce simplification and transparency in the primary market. This committee meets at regular intervals and makes recommendations to SEBI. The committee had received several representations from merchant bankers and other participants in the primary market regarding the various changes required in the SEBI (Disclosure and investor Protection) Guidelines, 2000, in order to make it more market/investor friendly. The committee discussed these suggestions and has made the following recommendations to SEBI : (I) Provisions relating to Book Building I (1) Requirement to mention floor price in the Red Herring Present Position The company is required to disclose the floor price in the Red Herring Prospectus to be submitted to RoC, at least 3 days prior to the bid opening date, as per Clause No. 11.3.1(vii)(a) of SEBI (DIP) Guidelines, 2000. Recommendation The company may be allowed to disclose the floor price, just prior to the bid opening date, instead of in the Red herring Prospectus. This may be done by any means like a public advertisement in newspapers etc. Rationale As per provisions of section 60B (2) of Companies Act, 1956 Red Herring prospectus is to be filed with ROC at least 3 days prior to the bid opening date. That means issuer company has to disclose the
A. Recommendations made by the Primary Market Advisory Committee
SEBI has constituted a standing committee, chaired by Shri M S Verma, Chairman, TRAI. This committee comprises representatives from ICAI, ICSI, investor associations, merchant bankers, Industry associations, Ministry of Finance etc. The terms of reference of this committee are as follows : 1. To advise SEBI on matters relating to regulation of intermediaries for ensuring investor protection in the primary market. 2. To advise SEBI on issues related to development of primary market in ndia. 3. To advise SEBI on matters required to be taken by for changes in legal framework to introduce simplification and transparency in the primary market. This committee meets at regular intervals and makes recommendations to SEBI. The committee had received several representations from merchant bankers and other participants in the primary market regarding the various changes required in the SEBI (Disclosure and investor Protection) Guidelines, 2000, in order to make it more market/investor friendly. The committee discussed these suggestions and has made the following recommendations to SEBI : (I) Provisions relating to Book Building I (1) Requirement to mention floor price in the Red Herring Present Position The company is required to disclose the floor price in the Red Herring Prospectus to be submitted to RoC, at least 3 days prior to the bid opening date, as per Clause No. 11.3.1(vii)(a) of SEBI (DIP) Guidelines, 2000. Recommendation The company may be allowed to disclose the floor price, just prior to the bid opening date, instead of in the Red herring Prospectus. This may be done by any means like a public advertisement in newspapers etc. Rationale As per provisions of section 60B (2) of Companies Act, 1956 Red Herring prospectus is to be filed with ROC at least 3 days prior to the bid opening date. That means issuer company has to disclose the